Markets 
U.S. President Donald Trump’s tariffs have led to a tangle of red tape and extra expenses for Canadian wool producers and hobbyists, and some are walking away from their U.S. customers altogether.
Judy Enright Smith, who owns the Wabi Sabi yarn shop in Ottawa, said she’s running out of patience. The last time her American supplier visited, she wore an “Elbows Up” T-shirt.
“At first, it was business,” she said. “Now, it’s personal.”
The U.S. has imposed 50 per cent tariffs on greasy wool imports and some finished wool products, affecting Canadian wool producers who ship their product south to be scoured.
Greasy wool is the raw, unwashed product after a sheep is shorn. It still contains strands of hay, bugs and other bits of barnyard, as well as lanolin — an oily substance produced by sheep. The lanolin is extracted and can be used in cosmetics and other products, while the wool is cleaned and processed.
Canada lacks the same level of industrial processing as the U.S. and other countries, meaning Canadian producers often rely on foreign mills and other facilities to transform greasy wool into yarn and other products. Domestic production is mostly mid-sized or artisanal.
More and more Canadian producers are shipping their raw wool to China and the Czech Republic to evade U.S. tariffs and trade tensions. The chair of the Canadian Wool Council calls it an unfortunate rupture in a long-standing trading relationship at a time when wool prices are on the rise.
“Just as that’s happening, our biggest single market — the U.S. — is kind of closed to us now,” said Matthew Rowe.
“If you’re relying on cross-border supply chains to get something produced, it just doesn’t make economic sense anymore with these tariffs.”
Enright Smith said it no longer makes moral sense for her to stock U.S. labels in her store, despite their popularity with some of her customers. She said she’s looking to Europe to help fill the gap and is trying to find more wool products from Canada.
She said her American supplier sent a message to its Canadian clients at the start of the trade war telling them they would be “hurting the little guy” if they ceased doing business with the company because they’re frustrated with Trump.
Get breaking National news
Get breaking Canada news delivered to your inbox as it happens so you won’t miss a trending story.
Enright Smith said she read that argument as a self-serving attempt to blame Canadians for any commercial damage caused by Trump’s blunt-force campaign to change the trading relationship.
She said that this year, when her American supplier reaches out to make a sale, she’s going to say no.
“I don’t mind losing American customers because they basically voted for the guy,” she said of Trump.
One Canadian mill is shielded from the brunt of U.S. tariffs because it’s one of the few that process wool entirely in Canada.
New Brunswick’s Briggs and Little, which first opened in 1857, buys its wool from a co-operative in Carleton Place, Ont., and manufactures its products on-site, limiting the effects of U.S. tariffs.
But the oldest operating Canadian mill is not entirely untouched by Trump’s tariff agenda. Office manager Leah Little said the mill uses some U.S.-made parts and materials subject to tariffs.
“We do hope this mess is resolved before we need to replace any of our machinery parts that are not available in Canada,” she said.
Rowe said Briggs and Little is more the exception than the rule for Canadian wool and yarn producers — and a “great option” for knitters looking to buy local.
Shepherd and wool mill owner Anna Hunter of Long Way Homestead in Ste. Genevieve, Man., has been thinking about the Canadian wool industry for some time — and how to reimagine it.
Hunter, author of The True Cost of Wool, stopped shipping to the U.S. last year when Trump cancelled the de minimis exemption for imports, which had allowed shipments under US$800 to be accepted duty and tariff free.
It was just the latest blow to Canadian yarn producers still reeling from the COVID-19 pandemic’s disruption of global supply chains, Hunter said.
“All of a sudden, Canadian wool wasn’t moving anywhere than the United States. It was sitting in warehouses and because there was no resilience in how we sold, or where we sold our wool, there was no market,” she said.
“When I saw that wool was again included on this extra 50 per cent tariff list, I thought, ‘How many more hits will Canadian wool have to take before we start talking about creating a new system?’”
One challenge facing the Canadian industry is the need to ramp up mill capacity.
Hunter currently processes some 5,000 pounds of wool a year, which she said is a fraction of the wool she collects from her sheep.
She said she envisions a new domestic wool industry based on decentralized regional processing facilities built to handle different varieties of wool and support a more robust domestic textile industry.
Hunter said decoupling Canadian wool from the United States will require government and consumers to stop thinking of wool as just a byproduct of the sheep industry, and to start thinking of it as a commodity worth investment on its own.
She said Canadian knitters also have to get into the habit of checking the label and buying local.
“We’re going to have to really wrestle with how our clothing system has become completely disconnected from agriculture and from our own economy,” she said.
That’s the conundrum facing much of the North American economy now: decades of deepening integration can’t be easily unwound.
“For those of us who are deeply passionate about the sheep industry and about Canadian wool, it does matter,” Hunter said. “And we do need to reckon with it — not just because of this madness coming out of the White House, but because we want to see a future with Canadian wool thriving and being an important part of our agricultural commodities and a part of our textile industry.”
Rowe said if the tariff dispute isn’t resolved soon, it’s going to be a particularly difficult fall for producers as shoppers look to spruce up their winter wardrobes. Producers can make a year’s worth of profit from a single fall season.
Rowe said his organization is trying to shore up Canadian production by advocating for expanded domestic mill capacity and new supply chains.
But untangling ties between the Canadian and U.S. wool industries forged over generations is “almost jarring” to do, he said.
“We don’t want all our wool in one bag, to modify the expression,” Rowe said.
“We need to spread around our opportunities, but I think that doesn’t lessen the hurt, and even the sense of betrayal, that many of the people in our value chain are feeling.”
Read the full article here
